Pradhan Mantri Awas Yojana: Home Loan Subsidy Extended for Middle Income Group

In what is
certainly good news for India’s middle class, the Central Government has
decided to extend the timeline for the Credit Linked Subsidy Scheme or CLSS.
Earlier, the CLSS was supposed to expire on March 31, 2019. Now, the ‘housing
for all’ program has been extended by a full year and will run till 2020.

Hardeep
Singh Puri, who is a senior Union minister in charge of Urban Housing Schemes
made the declaration in the national capital recently. Puri had earlier hinted
that the Pradhan Mantri Awas scheme
would last for longer than it was initially announced.

Now, more
people will be able to avail a lower home loan interest rate thanks to the
scheme’s extension.

The
minister made another revealing insight. He said that till March 2019, more
than 3.3 Lakh people had taken advantage of the Pradhan Mantri Awas Yojana loan
to build their own homes.

Earlier,
most of them could not afford to take a home loan because the interest rates
were too high. Now, with the PMAY in place, both urban and rural housing
projects are accelerating faster due to ready funds from most financial
institutions.

The CLSS Scheme

The
Government’s pet PMAY project was first introduced in
June 2015, one year after the new Government was sworn in. Since India has a
longstanding history of perennial housing shortage, the step was seen as an
ambitious plan to create more options towards affordable homes for the section
of the populaHello Priya,

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with a lack of it.

Based on
incomes, the Government also created separate income categories, each of which
come with respectively better different financial benefits. With the CLSS
scheme, the PMAY eligibility became simpler.

Under the
scheme, those who had:

Families with incomes between Rs.
Six Lakh but lower than Rs. Twelve Lakh could avail housing loan of up to Rs.
Nine Lakh with a repayment tenor of 20 years. The Government would provide an
interest subsidy of 4%. All individuals under this income scheme fall under the
lower spectrum of MIG or Middle Income Group. As per Pradhan Mantri Awas
eligibility, individuals with comparatively lower incomes could now afford to
buy their own homes.

Families with incomes between Rs.
Twelve Lakh and Rs. Eighteen Lakh were eligible for a 3% cut in the interest
rate on the same amount with similar tenors. The Government rightly believed
that it would bring more people under the PMAY eligibility umbrella.

Who Will Benefit from the Extension?

Studies
have shown that a significant percentage of people who earn in these income
brackets live in urban or semi-urban cities. They are the ones who will benefit
the most.

If you are
planning to avail a home loan soon, make sure you check your chances using the
home loan eligibility calculator.

Most
respected financial institutions and NBFCs provide significant amounts as loan
for housing. Home loans have the potential to challenge the largely urban
housing crisis which affects most of India’s largest cities. Mumbai and Delhi,
besides the NCR, have a large number of people who live in slums without any
rights to their property. That is where the Government and private sector
players can come in to create affordable housing solutions.

In turn, it
will lead to more concrete structures being built across the country and help
lift millions of people from poverty.

The
minister has also confirmed that the Government will set aside a larger amount
of revenue in the next budget to allocate for the Pradhan Mantri Awas program.
You too can utilise this positive step for your future and avail a home loan
from a recognised financial institution. Make sure to use a home loan EMI
calculator to plan your finances and enjoy better living standards without
fail.